Thousands of businesses should be covered by their insurance for losses caused by coronavirus lockdowns, the UK Supreme Court has ruled, in a test case that pitched the industry regulator against major insurance companies.

Small businesses, from restaurants to nightclubs and wedding planners to beauty parlours, have said they faced ruin after attempts to claim compensation for business losses during the pandemic were rejected by insurers. Six of the world’s largest commercial insurers — Hiscox, RSA, QBE, Argenta, Arch and MS Amlin — said many business interruption policies did not cover widespread disruption after Britain’s first national lockdown last March.

But senior judges said many payouts should be triggered after scrutinising non-damage insurance policy clauses — which cover disease, denial of access to business premises and hybrid clauses — in a victory for policyholders and the regulator.

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